Haven, the joint venture started by three of the most powerful U.S. companies—Amazon, Berkshire Hathaway and JP Morgan—that promised to disrupt the way large corporations deliver benefits to their employees by lowering costs and improving outcomes in health care, is disbanding by the end of February 2021 after three years.
“Haven explored a wide range of health care solutions, as well as piloted new ways to make primary care easier to access, insurance benefits simpler to understand and easier to use, and prescription drugs more affordable,” says a brief statement on the Haven website.
According to CNBC, Haven began informing employees Monday that it will shut down by the end of next month. Many of the Boston-based firm’s 57 workers are expected to be placed at Amazon, Berkshire Hathaway or JP Morgan Chase as the firms each individually push forward in their efforts. The three companies are still expected to collaborate informally on health care projects according to the CNBC piece.
Brooke Thurston, a spokeswoman for Haven, confirmed the company’s plans to close and gave this statement to CNBC:
“The Haven team made good progress exploring a wide range of health care solutions, as well as piloting new ways to make primary care easier to access, insurance benefits simpler to understand and easier to use, and prescription drugs more affordable. Moving forward, Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. will leverage these insights and continue to collaborate informally to design programs tailored to address the specific needs of our individual employee populations and locations.”
The announcement of the alliance in January 2018 drove health insurers’ stocks lower as investors wagered that the three giants would upend the country’s health care system by testing new ideas on more than a million employees. On Jan. 30, 2018, stocks of UnitedHealth, Aetna and Humana each fell 3%, while Anthem and Cigna fell more than 5%. CVS and Walgreens each fell more than 4% as well.
After the Haven shutdown news broke Monday, shares of UnitedHealth Group, Humana and CVS Health each climbed more than 2%.
Amazon, Berkshire Hathaway, and JPMorgan started Haven as an independent company that was “free from profit-making incentives and constraints,” with an initial focus of the company being on technology solutions to “provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.”
Any info on why it disbanded? It doesnt say it in the article but it reads as if they were unsuccessful in overthrowing the major medical insurers hold
They assumed the issues with our system are in how it is accessed and how that access is provided. They wanted to fix the middle man delivery systems of it, without fixing the issues at the point of care and payment of care.
The main issue in our system is out of control costs. Which are enabled by a payment system that has every incentive to keep costs rising steadily.
Until we fix that cycle, we will continue to see extreme increases in healthcare costs and health insurance costs.
We have not had anything close to a free market in healthcare in over 30 years. Everyone just says "insurance will pay for it" so who cares about the cost, all you pay is a co-pay. But who is paying for the insurance that is "paying for it"?? Who hasnt gotten a meaningful pay-raise in the past 20 years?? Ever wonder where that 5% is going?? Group Health is eating up americans would be pay increases. Its the largest economic drain on this nation.
They assumed the issues with our system are in how it is accessed and how that access is provided. They wanted to fix the middle man delivery systems of it, without fixing the issues at the point of care and payment of care.
The main issue in our system is out of control costs. Which are enabled by a payment system that has every incentive to keep costs rising steadily.
Until we fix that cycle, we will continue to see extreme increases in healthcare costs and health insurance costs.
We have not had anything close to a free market in healthcare in over 30 years. Everyone just says "insurance will pay for it" so who cares about the cost, all you pay is a co-pay. But who is paying for the insurance that is "paying for it"?? Who hasnt gotten a meaningful pay-raise in the past 20 years?? Ever wonder where that 5% is going?? Group Health is eating up americans would be pay increases. Its the largest economic drain on this nation.
Nothing concrete, but just my hypothesis……the common misconception is that insurance is the huge albatross of healthcare costs in the United States, and that's why everything costs so much. When actually the opposite is true. Insurance prices are the symptom, not the cause. Insurance companies profit roughly 5 cents out of every healthcare dollar spent…..
It's just a drop in the bucket. The huge costs come from doctors, specialists, medical facilities, hospitals, diagnostic tests, and paying for those that are either too stupid/lazy/incompetent to get insurance (when they can afford it), or are too broke, etc.
Haven likely realized that Americans expect high quality healthcare…..and guess what high quality healthcare costs a lot of?…….money. They probably also realized exactly how unhealthy and sick most Americans are. Unhealthy and sick Americans cost a LOT of money.
Haven likely ran the numbers and realized this was going to cost WAY more than they realized, and for what benefit to them? Absolutely none.
Nothing concrete, but just my hypothesis……the common misconception is that insurance is the huge albatross of healthcare costs in the United States, and that's why everything costs so much. When actually the opposite is true. Insurance prices are the symptom, not the cause. Insurance companies profit roughly 5 cents out of every healthcare dollar spent…..
It's just a drop in the bucket. The huge costs come from doctors, specialists, medical facilities, hospitals, diagnostic tests, and paying for those that are either too stupid/lazy/incompetent to get insurance (when they can afford it), or are too broke, etc.
Haven likely realized that Americans expect high quality healthcare…..and guess what high quality healthcare costs a lot of?…….money. They probably also realized exactly how unhealthy and sick most Americans are. Unhealthy and sick Americans cost a LOT of money.
Haven likely ran the numbers and realized this was going to cost WAY more than they realized, and for what benefit to them? Absolutely none.
That's not a recipe to make money very fast, if at all… and in the end the government (out of the goodness of their hearts and the money of our pocket books) will come in and screw it all up.
My question is, why did some major hitters decide it was even a viable option… sounds like someone sold them a bill of goods on the financial feasibility study, or the step in the market was more of a control issue? :err:
That's not a recipe to make money very fast, if at all… and in the end the government (out of the goodness of their hearts and the money of our pocket books) will come in and screw it all up.
My question is, why did some major hitters decide it was even a viable option… sounds like someone sold them a bill of goods on the financial feasibility study, or the step in the market was more of a control issue? :err:
And lawyers and the cost of regulatory compliance. Both are huge.
And lawyers and the cost of regulatory compliance. Both are huge.
My guess is along similar lines. There is not as much money to be made in it as originally thought. In addition I would toss in "regulatory complications."
I will take 5% of $69 Billion all day long.
In theory, insurers are supposed to act as a non-bias middleman who looks after the best interest of the insured. Negotiating pricing and assuring competitive rates. However, they have no incentive to do that, since shareholders require ever increasing revenue from them. That means they allow prices to increase enough to justify (to regulators) 5%+ increases year after year after year. So not only is it 5% of $69 Billion, but its increasing at 5%is per year.